The Union Cabinet has officially given its nod to the Terms of Reference for the 8th Central Pay Commission (CPC). This significant move, announced on Tuesday, October 28, 2025, sets in motion the process of reviewing and determining the salary structure and retirement benefits for central government employees.
The government had previously revealed the formation of the 8th CPC in January 2025, tasking it with the critical responsibility of examining and proposing alterations to the pay and other benefits for its vast workforce.
The newly constituted Commission will feature a chairperson, a part-time member, and a member-secretary. Their mandate requires them to present their recommendations within 18 months from the date of the Commission’s establishment.
In its deliberations, the 8th CPC is expected to consider a wide array of factors. These include the prevailing economic climate of the nation and the necessity for careful financial management. The Commission must also ensure that sufficient funds remain for essential developmental projects and welfare initiatives. Furthermore, it will assess the costs associated with non-contributory pension schemes and the potential financial ripple effects its proposals might have on state governments. A comparative analysis of the current compensation, benefits, and working conditions of employees in central public sector undertakings and the private sector will also be a key part of its comprehensive review.
Should the need arise, the 8th CPC retains the flexibility to submit interim reports on specific issues within its scope as and when its recommendations on those matters are finalized.